Exports fall in May on ban on gold trading in SEZs

Imports, however, rose 6.9% to $44.7 bn vs $41.7 bn in May vs year ago period

Exports fell 1.1% to $24.5 billion in May this year compared to $24.7 billion in the same month last year, official data showed today.              

Imports, on the other hand, rose 6.9% to $44.64 billion against $41.7 billion over the period.

Despite government raising import duty on gold to 8% from 6%, import of yellow metal almost doubled to $8.4 billion in May from $4.4 billion.

Commerce secretary SR Rao attributed contraction in overall exports and rise in gold imports to recent move to ban gold trading in SEZs.

As such, trade deficit widened to $20.1 billion compared to $18.9 billion over the period. For the first two months of the current finaancial year, trade deficit rose to $37.9 billion compared to $30.97 billion.

This may further widen current account deficit which has already reached 6.7% in the third quarter of 2012-13.